BILL NUMBER: AB 2557	CHAPTERED  09/27/00

	CHAPTER   760
	FILED WITH SECRETARY OF STATE   SEPTEMBER 27, 2000
	APPROVED BY GOVERNOR   SEPTEMBER 26, 2000
	PASSED THE ASSEMBLY   AUGUST 30, 2000
	PASSED THE SENATE   AUGUST 28, 2000
	AMENDED IN SENATE   AUGUST 23, 2000

INTRODUCED BY   Assembly Member Margett
   (Coauthor:  Senator Figueroa)
   (Coauthors:  Assembly Members Dutra, Keeley, Mazzoni, and
Torlakson)

                        FEBRUARY 24, 2000

   An act to amend Section 3248 of the Civil Code, and to amend
Section 7103 of the Public Contract Code, relating to payment bonds.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 2557, Margett.  Payment bonds:  public works.
   Existing law requires every original contractor who is awarded a
public works contract by a state entity involving an expenditure in
excess of $5000 or by any other public entity involving an
expenditure in excess of $25,000 to file a payment bond.  Existing
law requires that payment bond to be in a sum equal to (1) 100% of
the total amount payable by the terms of the contract when that
amount does not equal or exceed $5 million, (2) 50% of the total
amount payable when that amount is not less than $5 million and not
more than $10 million, or (3) 25% of the total amount payable when
that amount exceeds $10 million.
   This bill would delete those provisions and instead require that
the payment bond be in a sum equal to 100% of the total amount
payable by the terms of the contract for all public works contracts.



THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 3248 of the Civil Code is amended to read:
   3248.  In order to be approved, the payment bond shall satisfy all
of the following requirements:
   (a) The bond shall be in a sum not less than one hundred percent
of the total amount payable by the terms of the contract.
   (b) The bond shall provide that if the original contractor or a
subcontractor fails to pay (1) any of the persons named in Section
3181, (2) amounts due under the Unemployment Insurance Code with
respect to work or labor performed under the contract, or (3) for any
amounts required to be deducted, withheld, and paid over to the
Employment Development Department from the wages of employees of the
contractor and subcontractors pursuant to Section 13020 of the
Unemployment Insurance Code with respect to the work and labor, that
the sureties will pay for the same, and also, in case suit is brought
upon the bond, a reasonable attorney's fee, to be fixed by the
court.  The original contractor may require of the subcontractors a
bond to indemnify the original contractor for any loss sustained by
the original contractor because of any default by the subcontractors
under this section.
   (c) The bond shall, by its terms, inure to the benefit of any of
the persons named in Section 3181 so as to give a right of action to
those persons or their assigns in any suit brought upon the bond.
   (d) The bond shall be in the form of a bond and not a deposit in
lieu of a bond.
  SEC. 2.  Section 7103 of the Public Contract Code is amended to
read:
   7103.  (a) Every original contractor to who is awarded a contract
by a state entity, as defined in subdivision (d), involving an
expenditure in excess of five thousand dollars ($5,000) for any
public work shall, before entering up the performance of the work,
file a payment bond with and approved by the officer or state entity
by who the contract was awarded.  The bond shall be in a sum not less
than one hundred percent of the total amount payable by the terms of
the contract.
   The state entity shall state in its call for bids for any contract
that a payment bond is required in the case of such an expenditure.

   (b) A payment bond filed and approved in accordance with this
section shall be sufficient to enter upon the performance of work
under a duly authorized contract which supplements the contract for
which the payment bond was filed if the requirement of a new bond is
waived by the state entity.
   (c) For purposes of this section, providers of architectural,
engineering and land surveying services pursuant to a contract with a
state entity for a public work shall not be deemed an original
contractor and shall not be required to post or file the payment bond
required in subdivisions (a) and (b).
   (d) For purposes of this section, "state entity" means every state
office department, division, bureau, board, or commission, but does
not include the Legislature, the courts, any agency in the judicial
branch of government, or the University of California.  All other
public entities shall be governed by the provisions of Section 3247
of the Civil Code.
   (e) For purposes of this section, "public work" includes the
erection, construction, alteration, repair or improvement of any
state structure, building, road, or other state improvement of any
kind.
